Tetra Tech shares decline on cautious outlook

PITTSBURGH - Shares of Tetra Tech Inc. slid Thursday, a day after the engineering consulting firm forecast earnings for fiscal 2010 that fell below of some Wall Street estimates.

The Pasadena, Calif.-based company said Wednesday it expects fiscal 2010 earnings of $1.25 to $1.35 per share on revenue of $1.45 billion to $1.55 billion.

In a note to investors, Janney Montgomery Scott analyst Debra Coy pointed to a higher consensus estimate of $1.37 per share and her firm's estimate of $1.33 per share. Analysts predicted revenue of $1.53 billion while her firm anticipated $1.47 billion.

"We believe the cautious outlook is due to continued delays in release of federal government work, as well as continued weakness in commercial building-related work and some state and local consulting work, which is hurting capacity utilization and margins," Coy wrote.

She continued: "We had been preparing for conservative guidance, though the bottom end of the range will probably scare some investors."

Still, Tetra Tech posted a 12.6 percent rise in fiscal fourth-quarter profit, helped by growth in its federal and international business. Net income rose to $20.5 million, or 33 cents per share, from $18.2 million, or 30 cents per share, a year earlier.

Quarterly revenue dropped 11.4 percent to $575.1 million from $649.2 million.

For the full fiscal year, the company's profit rose nearly 43 percent to $87 million, or $1.43 per share, from $60.9 million, or $1.02 per share.

Revenue climbed 6.6 percent to $2.29 billion from $2.15 billion. Net of subcontractor costs, revenue grew 11.3 percent to $1.39 billion from $1.25 billion.

Tetra Tech's Chairman and CEO Dan Batrack said the company's fiscal 2010 outlook "reflects solid growth for the year, with modest growth in the first half and additional strength in the back half."

Shares of Tetra Tech slid $2.42, or 8.9 percent, to $24.75 in midday trading.

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